An agreement 24 years in the making is set to come to fruition as the Brazilian government prepares to implement a tariff rate quota to allow an increase in duty-free wheat imports.
The TRQ will green light 750,000 metric tons of wheat to be imported duty-free from countries outside the Mercosur trade agreement (Brazil, Argentina, Paraguay and Uruguay). According to the U.S. Wheat Associates, the export promotion arm of the wheat sector, Brazil first agreed to the TRQ when it joined the World Trade Organization in 1995.
In a statement, USW President Vince Peterson said the move could mean big things for American wheat growers.
“Brazil is a quality-focused wheat market and its flour millers recognize that U.S. wheat can help them better meet their customers’ needs,” said USW President Vince Peterson. “Opening the TRQ will give those millers more consistent access to our wheat classes while still having the option to source from other countries. That is how the market should work and we welcome this opportunity.”
Brazil is the fourth largest wheat-importing country in the world. It produces 5 million to 6 million tons of wheat per year, but consumes about 10 million tons. Argentina and other Mercosur countries have long held an upper hand in exporting to the country, being able to take advantage of what USW calls “mostly unlimited duty-free access” to the Brazilian market. Other countries, including the U.S., have been subject to a 10% tariff.
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